Malaysia’s ambition to turn into a technological and digital powerhouse has seen the introduction of new and amended laws.
From the Cyber Security Act that came into effect in August to the amended Data Protection Act 2010, these steps are critical in securing data and digital trust in the country.
It also comes at a time when Putrajaya is set to name its second 5G operator, with many placing their bets on China’s Huawei.
In fact, the subject of 5G was also raised during the tabling of Budget 2025 in the Dewan Rakyat last Friday (Oct 18). Prime Minister Datuk Seri Anwar Ibrahim, who is also the Finance Minister, said in his budget speech: “Moving forward, the government will announce the second 5G network as a means to increase competitiveness in the Information and Communication Technology (ICT) field.”
He added that the government will continue to encourage the use of 5G, especially to spur 5G case studies, as Malaysia assumed the Asean chair for 2025 earlier this month.
Barely 12 hours after Budget 2025 was presented, industry players and observers were sharing notes on the South China Morning Post’s article that was published on Oct 19.
The article said that Huawei has emerged as the odds-on favourite to build Malaysia’s second 5G network – despite “the West’s espionage concerns”.
And this is where the Cyber Security Act comes in. A cornerstone of Malaysia’s digital security landscape, the Act introduces significant regulations to safeguard the National Critical Information Infrastructure (NCII). This is to protect Malaysians from cyber threats.
Under the Act, the NCII is defined as any operation in which the disruption of its computer systems would cause service disruptions in security, defence, foreign relations, state or federal government functions, the economy, or threaten public health, safety or order in Malaysia. NCII sectors include defence and national security, information, communications, and digital.
The Act also defines the roles and responsibilities of various entities, including critical infrastructure sector leads, and the duties and powers of the Chief Executive of the National Cyber Security Agency (NACSA).
The agency was given a shot in the arm, as revealed in Budget 2025. Anwar announced an allocation of RM10 million, and the addition of 100 positions at NACSA to strengthen the country’s cyber security posture, and the enactment of the Cyber Security Act 2024.
At present, Malaysia’s 5G infrastructure is owned by Digital Nasional Berhad, a government agency. The infrastructure was built by Ericsson. The present 5G network provides over 80 per cent coverage in populated areas.
Hints about an Asian-based company getting the gig have emerged in recent times. In fact, Anwar, at a Huawei event last year, said: “While we get the best from the West, we should also benefit from the best from the East.”
Malaysia’s relationship with China has been rather rosy, despite rising tensions and territorial claims between the republic and several Southeast Asian nations in the South China Sea. Several key leaders have visited China in recent months. Malaysia’s King, Sultan Ibrahim, and Anwar visited the Republic in September. Communications Minister Fahmi Fadzil also visited China in late September.
For the record, Fahmi’s ministry, via the Malaysian Communications and Multimedia Commission, is evaluating the second 5G tenders.
Huawei subjected to various US sanctions since 2019
According to Huawei’s website, the company’s foray into the country began in 2001. Since then, the company has deployed 3G and 4G networks throughout the nation, provided training to develop ICT skills across various industries, and worked closely with various stakeholders to advance Malaysia’s digital economy.
Huawei has cooperated with Maxis to set up a 5G TechCity project. Under this project, Maxis and Huawei have jointly developed several 5G use cases for Malaysian enterprises and also researched the use of 5G technology, such as Massive Multiple-Input Multiple-Output (MIMO), in the 4G network.
Huawei, however, has been subjected to various US sanctions since 2019. The company was placed on a US trade restriction list in 2019 amid fears it could spy on Americans.
In 2022, the Biden administration banned approvals of new telecommunications equipment from Huawei and ZTE because they pose “an unacceptable risk” to US national security. In May, the US government revoked some licences that allowed US chip makers to export certain goods to Huawei.
